Germany Not Seeking Stake in Merged EADS/BAE: Report

Oct. 2, 2012 - 08:36AM
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PARIS — Germany will not seek a stake in the company born from a planned merger of European aerospace giant EADS and British defense group BAE Systems, French newspaper Le Figaro reported Oct. 2.

The German media have been speculating that Berlin planned to take an equal stake in the merged company as France, a move that could have jeopardized tie-up plans.

But Le Figaro, which quoted “a good source,” reported that “the German state is not asking for a stake” as part of demands that it has put forward to EADS in merger negotiations.

Beyond guarantees on jobs, the industrial sites, research and development, Berlin is rather seeking greater representation in the new firm, such as “for example the number of German administrators,” according to someone close to EADS quoted by Le Figaro.

EADS would not comment on the report.

Moves by France and Germany to seek a stake in the new firm could torpedo the merger plan, as it is aimed partly at loosening sovereign control in order to facilitate it winning defense contracts in the United States.

The United States is highly skeptical of handing out defense contracts to semi-public foreign companies.

Berlin, Paris and London each has a veto right on the merger negotiations.

The British government prefers the three states each receive a “special share,” which would allow each to block any entity from holding more than 15 percent of the merged firm.

EADS, which controls aircraft maker Airbus, and British arms manufacturer BAE Systems announced plans on Sept. 12 to create a $45-billion (35-billion-euro) giant to rival Boeing of the United States.

The companies have until Oct. 10 to make a formal statement to the authorities to say that the deal is going ahead, is being abandoned, or to request a delay.